Global Economics

NTL Buys Virgin Mobile for $1.7 billion

The two companies announced on Tuesday morning that NTL will pay a total of £962.4m for Virgin Mobile. NTL had previously offered £871m for the company, which had been rejected by the Virgin Group.

The deal means that NTL — which merged with fellow cable operator Telewest in April — can provide mobile phone services to its customers alongside its existing fixed-line telephony, broadband and cable television offerings. NTL believes quadruple play will help to swell its income, especially if its customers decide they want to take all their telecoms services from one provider.

The deal "enhances NTL as a scale competitor in the UK telecommunications industry, enabling it to become the first market participant offering an integrated quad-play product suite, combining NTL's network, products and triple-play experience together with Virgin Mobile's national mobile business, creating a national communications and entertainment company," said NTL in a statement released on Tuesday.

NTL will also have the right to rebrand itself under the Virgin name.

"NTL believes that the Virgin brand would bring it a strong consumer appeal, positioning, and customer focus to a quad-play offering. It would allow NTL to utilise Virgin's brand expertise and consumer focus and should help increase customer loyalty and appeal," said the cable operator, pointing to a recent survey which found that the Virgin brand is the most admired brand in the UK.

In contrast, NTL has been dogged by persistent customer complaints about its service, with some disgruntled users dubbing it "NTHell".